When the Federal Reserve Bank of Philadelphia conducted a recent survey of economists about prospects for growth in 2013, the average guess was a gain in GDP of 2.3%. More interestingly, there was very little deviation from this figure. All of the predictions fell within a fairly narrow range. At the bottom 25th percentile, that is, among those economists who were so pessimistic that only 25% predicted lower growth, the growth forecast was 2.1%. At the 75th percentile, that is, among those so optimistic that only 25% predicted a higher figure, the growth forecast was 2.5% In only two of the last 45 years has there been so narrow a range of opinion among economists as to where the economy is heading.
According to an article entitled "Economists Agree? Start Worrying," in the Jan 26-27 issue of The Wall Street Journal, the probable reason for this narrow range of outlooks is that, over the past five years, we have heard a lot of stark warnings on where the economy was headed, predicting everything from runaway inflation to severe depression--but all of them were wrong. So now, the consensus view says we are probably going to get more of what we already have---continued improvement, but at a fairly slow rate.